Sounds promising, but at least in the US, I think the bigger problem on housing is buildable land / environmental permitting / access to water / transportation / etc. Cuby can't address any of those. And my understanding of the homeless issue in the US is mostly in cities, which single family homes won't address.
Many US cities with homelessness have a very large percentage of single family homes. In San Francisco, Los Angeles and San Diego over 70% of residentially zoned areas are limited to less than 3 stories, mostly single family homes, but also low rise duplexes and apartment complexes and lately ADUs. And that doesn’t include nearby suburbs which have stricter zoning.
The bigger problem for the MMF type construction is that it requires a minimum number of new homes to be near each other, and doesn’t work if you are just building new homes in single lots in established neighborhoods.
In our area water is a huge problem for building. Just over thirty years ago a major Army base in our area closed down. Place housed an infantry division and the associated troop/dependent housing. The water credits saved were and are being used to build all sorts of housing on that footprint - apartments, town houses, single-family homes. The state of CA a few years ago mandated every town/city develop a plan to build X units of housing, with Y amount of that being 'affordable housing'. In our area, towns like Carmel, Monterey, and Pacific Grove are basically built-out. For them to meet state mandate they will need to build granny units and build in parking lots. Only the town I live in and the neighboring town have the land and the water since the Army base was on parts of both towns.
Parking lots will go away when Tesla SDF become ubiquitous enough for a 3 minute wait. AI speculates that Houston could reach that level with 200K teslas; 3-5 years away. thats a big deal and a game changer. Not sure about California but Texas will embrace it and we have lots of parking lots.
Ah, but there's the rub. CA and TX are generally great places for electric vehicles, few areas in either state with really harsh winters that cut down range. Not every place will use electrics to that extent. And power grids will need to keep up with demand. Easier to do in TX than in CA. Indeed, TX has plenty of parking lots, lived there nine years. But water can be a challenge in parts of the state. In San Antonio we were always interested in the level of the Edwards Aquifer and in San Angelo when it rained more than a certain amount the newspaper noted it.
You should read chapter 10 in Potter’s new book The Origins of Efficiency. The whole book is good if a little tedious but Chapter ten explains in painful detail why manufactured housing has a very small share of the US housing market. I am not going to recap the reasons here as it takes him 20 pages to do it. Cubby looks to have solved the scale/ transportation costs/ size of addressable market problem, but that will not get it done alone. You have NIMBY( what does this do to the value of my home?); tens of thousands of building codes that need to be redone by building departments that cannot even schedule inspections on time; construction trades and builders who will vigorously fight the incursion in their turf; and other practical issues like who does the warranty work and how do I fix it when it breaks (e.g., the wiring shorts out) and how do I get the home conventionally financed. Toyota of manufacturing fame has a housing division that has never taken off in their home country. I was on the first board of directors of the largest and most successful public manufactured housing co in us and currently on the board of a publicly held supplier to the housing industry and I will take the short side of this bet.
It is so frustrating to hear about the non-existent housing shortage and lack of affordability.
I have been in the industry for 40 years and have analyzed the data and we have over 10 million (!) vacant housing units in America. We don't need to build another house for 5-10 years and we would still be fine. NAHB and NAR love the American Dream propaganda. Demand for housing is down 75% from the 1980's when Baby Boomers were at peak demand. No one mentions the need for 75% fewer houses per year. Also, 2.5 million left the USA last year....that leaves another 1 million units vacant! No one mentions that. As for affordability, mortgages are very cheap at 6%-7%. 22 million houses were financed in the last 3 years. No decline from when interest rates were 3%-4%. Spend less on eating out, tattoos, drinking $15 cocktails, et al. It's a personal decision to afford a house payment or complain you cannot - change your lifestyle and buy a smaller house for the latter. People hate stats. just easier to drink the kool-aid from NAR and NAHB and say we need more housing and more affordability. As the joke goes in a different way, when are NAR and NAHB lying? When their lips are moving:)
Good observation. My only counter is that I think its location specific. Urban areas.....coastal in particular........blue state even more so don't have the housing. Texas, midwest, deep south........yes.
For many people, when the cost of owning is less than the cost of renting, that’s when they start shopping for a home. There’s a lot of upside to renting, just as there is upside to owning.
I recall there was no housing shortage in the 2008-2012 post GFC period. My town in New Mexico may be an anomaly but we have seven vacant houses within a couple of blocks of ours. Reasons vary, some don't want to rent out the houses anymore because of crappy renters and they're just sitting on them as investments, the lady across the street is saving the house for her daughter when she graduates college. Others have had the house in the family for generations and don't want to let them go even though they are falling apart with no one living in them. The first house we bid on when trying to move here, but lost, is STILL sitting empty and needing work--not sure what's up there.
But this isn't a high demand urban area so don't know if that translates.
I think the point of this is that this does an end around on the bureaucracy. The house meets code and the builder can pay more for dirt because the product is cheap and fast. Union labor is also avoided
It will not be an end around on bureaucracy. Even building permit currently is granted by the local building authority, usually at a city/town level. That process will remain regardless of the construction method.
But any improvement helps. Right now we are in a death spiral (upwards). Houses cost more, so people (including the trades working on the houses) have to make more, which as an input to the costs mean houses have to cost more, etc. Any reduction in cost slows, and maybe even eventually reverses, that cycle.
My point is that you cannot deny a permit just because of how the house is built. You can't say "we don't like factory built homes that are cheap and fast" If its code compliant and otherwise is ultimately a normal home then it goes through.
"you cannot deny a permit just because of how the house is built."
They absolutely can and will. And there is little recourse. You can sue the township/city/county/State, but that costs a lot of money and takes a lot of time.
They have to follow the rules they have in place. Here is the way this works. You show up with house plans and they review and after going back and forth and you tweaking whatever it is thats wrong they approve the plan. They need not know how it will be built but that it will be done as permitted. They are not set up to arbiter whether they like the factory approach and they would lose that type of case. It may take a lawsuit, but once the precedent is set that would be that. The reality is that once one home goes up and its cheap and it does not feel fabricated much of the resistance will be, if not muted, offset by those who see the benefit
You imply that a lower cost house = lower price/ more affordable house. Why would that be the case? If I’m a developer and have acres of house-ready lots in a great location (a huge determinant of price), why would I not price the homes at the prevailing $/sqft market price?
You would, so the cost is really a floor on house prices. But at the margin the increased supply of houses should reduce their prices relative to what the would otherwise be. And the more developers use this system the more such downward pressure on prices.
Totally agree. Other things being equal and in the long term. But to obtain liftoff in the near term, these guys need developers for whom this is an obviously super compelling model. And I’m thinking it may not be the upsize buyer for whom the buying decision involves so many very important variables that are radically different from zip code to zip code and which are key to price appreciation. Rather, developers for the downsize market may find this much more attractive - maybe the 55+ market for whom this model would provide a high quality, lower cost way to downsize.
I periodically search for a solid, single story factory built home. It would be our last home and I would be willing to buy the land , prep, etc. we owned a factory built home in the 1990s. They were built in a local factory and assembled on site. When the development had finished, the factory became the local YMCA. The houses were modular with full single story, half two story, full two story, detached single story garage, etc. The internal walls were not load bearing so floorplans were somewhat flexible. The floor joists were manufactured and the best made I have ever experienced. The floors will never squeak. The inside was easy to customize as a homeowner. Same for painting the exterior. Cost was much less than the custom home we moved from across town. Today the prices have become comparable between the two as the communities have matured. This business model appears to follow and improve on the one I experienced in the 1990s. It certainly merits consideration. There are many areas in the US where I can envisualize it being a gamechanger. We have several children working hard here in Virginia to have a reasonably priced quality single family home for their families. I would much prefer these over the townhome communities we see her in much of Northern Virginia as well. I look forward to watching their progress.
Why not rent like most of us start out doing:) People just want it all without earning it. Wait 20 years until you have saved enough for a real down payment and buy a house then.
Current manufactured homes get us close to this. I just put 2 up for sale in golden valley AZ. Less th-n $300k with 2 acres. Thinking my buyer is someone from LA tired of taxes and million dollar mortgage. No takers yet. First time trying this. But so far doesn't prove your thesis. Disappointed
The market has been slowing. It'll take more patience. Assuming solid water and power, I think you've got an attractive set of properties for relocating Californians.
You begin by mentioning Katerra shipping air, as if entire complete homes came out of the factory and were shipped cross country. Why did they not build just the finished walls, roofs, and floors, and assemble on site? Yes, electrical and plumbing would need final connection, but that's got to be cheaper than shipping air. There must be more to the story.
So I looked it up in Wikipedia. It says they did just that, manufacturing complete walls and other components, and specialized in multi-family construction -- presumably apartments, duplexes, or quadplexes, not single family homes.
So there's more to the Katerra story.
Back to Cuby. They don't move the factory to each housing site. How do they avoid moving air? Do they build walls, roofs, and floors, ship those, and assemble them? How are they different from Katerra?
That was my thought too. I think Cuby can get the factory closer to the build and has crazy efficiency in shipping. Both those streamline the process a bit more than the traditional ' house in a box' model (and much more than the pre-builts on a trailer---gawd how I hate the way those things mangle traffic). Cuby may be maxing out the efficiency in their specialty but grading, foundations, utilities, etc. are still in need of upgrades in that regard.
I'm a retired firefighter. Here in the fire prone West housing needs to go vertical not horizontal. People are living where they shouldn't. Has our housing innovator taken this into consideration?
Interesting, looked it up--apparently the Depression causing mortgage defaults and WWII causing lumber and material shortages caused Sears to end the housing kits. Post WWII people wanted more customized homes and homes were more complicated with utilities so those both kept Sears from starting back up. So says Google AI anyway.
the genius of your average mind when given the motivation of the "free market" . Today's athletes seem to be "otherworldly" and these two innovators are also displaying the same otherworldly actions of those athletes .... you have to love it
Can you provide more clarity on the customization of these homes? Is the photo of the Michigan house the actual house, or is that a rendition? I'm envisioning something that looks cheap, and I'm not sure that's what actually possible.
Also, this works in places where there is available land. A lot of the places where people want/need to live are filled with homes that are too expensive, and/or older. I guess Cuby can't solve it all, but it would be great to see this problem addressed as well.
Stephen, the idea of the house factory is brilliant. I wan to see it work. However, I do see a possible issue. Humans inevitably want to show off, to point out how they are better, different, special. I don't know how a cookie cutter house, repeatable down to the electric plate screw position, will feel to humans. Possibly OK, given the human can customize when s/he has the time. That would be my only concern. Otherwise, the idea looks great
Why was the PAPA Factory built in China? Couldn't it have been built in the free world somewhere?
Because it was their money, their skin in the game, their choice.
Sounds promising, but at least in the US, I think the bigger problem on housing is buildable land / environmental permitting / access to water / transportation / etc. Cuby can't address any of those. And my understanding of the homeless issue in the US is mostly in cities, which single family homes won't address.
Many US cities with homelessness have a very large percentage of single family homes. In San Francisco, Los Angeles and San Diego over 70% of residentially zoned areas are limited to less than 3 stories, mostly single family homes, but also low rise duplexes and apartment complexes and lately ADUs. And that doesn’t include nearby suburbs which have stricter zoning.
The bigger problem for the MMF type construction is that it requires a minimum number of new homes to be near each other, and doesn’t work if you are just building new homes in single lots in established neighborhoods.
In our area water is a huge problem for building. Just over thirty years ago a major Army base in our area closed down. Place housed an infantry division and the associated troop/dependent housing. The water credits saved were and are being used to build all sorts of housing on that footprint - apartments, town houses, single-family homes. The state of CA a few years ago mandated every town/city develop a plan to build X units of housing, with Y amount of that being 'affordable housing'. In our area, towns like Carmel, Monterey, and Pacific Grove are basically built-out. For them to meet state mandate they will need to build granny units and build in parking lots. Only the town I live in and the neighboring town have the land and the water since the Army base was on parts of both towns.
Parking lots will go away when Tesla SDF become ubiquitous enough for a 3 minute wait. AI speculates that Houston could reach that level with 200K teslas; 3-5 years away. thats a big deal and a game changer. Not sure about California but Texas will embrace it and we have lots of parking lots.
Ah, but there's the rub. CA and TX are generally great places for electric vehicles, few areas in either state with really harsh winters that cut down range. Not every place will use electrics to that extent. And power grids will need to keep up with demand. Easier to do in TX than in CA. Indeed, TX has plenty of parking lots, lived there nine years. But water can be a challenge in parts of the state. In San Antonio we were always interested in the level of the Edwards Aquifer and in San Angelo when it rained more than a certain amount the newspaper noted it.
You should read chapter 10 in Potter’s new book The Origins of Efficiency. The whole book is good if a little tedious but Chapter ten explains in painful detail why manufactured housing has a very small share of the US housing market. I am not going to recap the reasons here as it takes him 20 pages to do it. Cubby looks to have solved the scale/ transportation costs/ size of addressable market problem, but that will not get it done alone. You have NIMBY( what does this do to the value of my home?); tens of thousands of building codes that need to be redone by building departments that cannot even schedule inspections on time; construction trades and builders who will vigorously fight the incursion in their turf; and other practical issues like who does the warranty work and how do I fix it when it breaks (e.g., the wiring shorts out) and how do I get the home conventionally financed. Toyota of manufacturing fame has a housing division that has never taken off in their home country. I was on the first board of directors of the largest and most successful public manufactured housing co in us and currently on the board of a publicly held supplier to the housing industry and I will take the short side of this bet.
You still need the contractor and skilled labor to build the house and put in foundation etc
It is so frustrating to hear about the non-existent housing shortage and lack of affordability.
I have been in the industry for 40 years and have analyzed the data and we have over 10 million (!) vacant housing units in America. We don't need to build another house for 5-10 years and we would still be fine. NAHB and NAR love the American Dream propaganda. Demand for housing is down 75% from the 1980's when Baby Boomers were at peak demand. No one mentions the need for 75% fewer houses per year. Also, 2.5 million left the USA last year....that leaves another 1 million units vacant! No one mentions that. As for affordability, mortgages are very cheap at 6%-7%. 22 million houses were financed in the last 3 years. No decline from when interest rates were 3%-4%. Spend less on eating out, tattoos, drinking $15 cocktails, et al. It's a personal decision to afford a house payment or complain you cannot - change your lifestyle and buy a smaller house for the latter. People hate stats. just easier to drink the kool-aid from NAR and NAHB and say we need more housing and more affordability. As the joke goes in a different way, when are NAR and NAHB lying? When their lips are moving:)
Good observation. My only counter is that I think its location specific. Urban areas.....coastal in particular........blue state even more so don't have the housing. Texas, midwest, deep south........yes.
For many people, when the cost of owning is less than the cost of renting, that’s when they start shopping for a home. There’s a lot of upside to renting, just as there is upside to owning.
I recall there was no housing shortage in the 2008-2012 post GFC period. My town in New Mexico may be an anomaly but we have seven vacant houses within a couple of blocks of ours. Reasons vary, some don't want to rent out the houses anymore because of crappy renters and they're just sitting on them as investments, the lady across the street is saving the house for her daughter when she graduates college. Others have had the house in the family for generations and don't want to let them go even though they are falling apart with no one living in them. The first house we bid on when trying to move here, but lost, is STILL sitting empty and needing work--not sure what's up there.
But this isn't a high demand urban area so don't know if that translates.
Sounds great. But if I am not mistaken, the problem is rarely the cost of building the houses themselves, but all the bureaucracy.
I think the point of this is that this does an end around on the bureaucracy. The house meets code and the builder can pay more for dirt because the product is cheap and fast. Union labor is also avoided
Any improvement is welcome. But I'll be careful with underestimating the bureauracy! :-)
It will not be an end around on bureaucracy. Even building permit currently is granted by the local building authority, usually at a city/town level. That process will remain regardless of the construction method.
But any improvement helps. Right now we are in a death spiral (upwards). Houses cost more, so people (including the trades working on the houses) have to make more, which as an input to the costs mean houses have to cost more, etc. Any reduction in cost slows, and maybe even eventually reverses, that cycle.
My point is that you cannot deny a permit just because of how the house is built. You can't say "we don't like factory built homes that are cheap and fast" If its code compliant and otherwise is ultimately a normal home then it goes through.
"you cannot deny a permit just because of how the house is built."
They absolutely can and will. And there is little recourse. You can sue the township/city/county/State, but that costs a lot of money and takes a lot of time.
They have to follow the rules they have in place. Here is the way this works. You show up with house plans and they review and after going back and forth and you tweaking whatever it is thats wrong they approve the plan. They need not know how it will be built but that it will be done as permitted. They are not set up to arbiter whether they like the factory approach and they would lose that type of case. It may take a lawsuit, but once the precedent is set that would be that. The reality is that once one home goes up and its cheap and it does not feel fabricated much of the resistance will be, if not muted, offset by those who see the benefit
You imply that a lower cost house = lower price/ more affordable house. Why would that be the case? If I’m a developer and have acres of house-ready lots in a great location (a huge determinant of price), why would I not price the homes at the prevailing $/sqft market price?
You would, so the cost is really a floor on house prices. But at the margin the increased supply of houses should reduce their prices relative to what the would otherwise be. And the more developers use this system the more such downward pressure on prices.
Totally agree. Other things being equal and in the long term. But to obtain liftoff in the near term, these guys need developers for whom this is an obviously super compelling model. And I’m thinking it may not be the upsize buyer for whom the buying decision involves so many very important variables that are radically different from zip code to zip code and which are key to price appreciation. Rather, developers for the downsize market may find this much more attractive - maybe the 55+ market for whom this model would provide a high quality, lower cost way to downsize.
How do they plan to deal with the various labor unions that represent different
skills in the construction trades?
They avoid them. thats part of the disruption.
I periodically search for a solid, single story factory built home. It would be our last home and I would be willing to buy the land , prep, etc. we owned a factory built home in the 1990s. They were built in a local factory and assembled on site. When the development had finished, the factory became the local YMCA. The houses were modular with full single story, half two story, full two story, detached single story garage, etc. The internal walls were not load bearing so floorplans were somewhat flexible. The floor joists were manufactured and the best made I have ever experienced. The floors will never squeak. The inside was easy to customize as a homeowner. Same for painting the exterior. Cost was much less than the custom home we moved from across town. Today the prices have become comparable between the two as the communities have matured. This business model appears to follow and improve on the one I experienced in the 1990s. It certainly merits consideration. There are many areas in the US where I can envisualize it being a gamechanger. We have several children working hard here in Virginia to have a reasonably priced quality single family home for their families. I would much prefer these over the townhome communities we see her in much of Northern Virginia as well. I look forward to watching their progress.
"We have several children working hard here in Virginia to have a reasonably priced quality single family home for their families."
Children? Really?
Why not rent like most of us start out doing:) People just want it all without earning it. Wait 20 years until you have saved enough for a real down payment and buy a house then.
Amazing, isn't it. 6. 4 own their homes and two saving.
OK. NOW I get it: "Several *adult offspring* working hard..."
Current manufactured homes get us close to this. I just put 2 up for sale in golden valley AZ. Less th-n $300k with 2 acres. Thinking my buyer is someone from LA tired of taxes and million dollar mortgage. No takers yet. First time trying this. But so far doesn't prove your thesis. Disappointed
The market has been slowing. It'll take more patience. Assuming solid water and power, I think you've got an attractive set of properties for relocating Californians.
You begin by mentioning Katerra shipping air, as if entire complete homes came out of the factory and were shipped cross country. Why did they not build just the finished walls, roofs, and floors, and assemble on site? Yes, electrical and plumbing would need final connection, but that's got to be cheaper than shipping air. There must be more to the story.
So I looked it up in Wikipedia. It says they did just that, manufacturing complete walls and other components, and specialized in multi-family construction -- presumably apartments, duplexes, or quadplexes, not single family homes.
So there's more to the Katerra story.
Back to Cuby. They don't move the factory to each housing site. How do they avoid moving air? Do they build walls, roofs, and floors, ship those, and assemble them? How are they different from Katerra?
That was my thought too. I think Cuby can get the factory closer to the build and has crazy efficiency in shipping. Both those streamline the process a bit more than the traditional ' house in a box' model (and much more than the pre-builts on a trailer---gawd how I hate the way those things mangle traffic). Cuby may be maxing out the efficiency in their specialty but grading, foundations, utilities, etc. are still in need of upgrades in that regard.
I am amazed at the things I learn at 83 from reading the Rational Optimist.
I'm a retired firefighter. Here in the fire prone West housing needs to go vertical not horizontal. People are living where they shouldn't. Has our housing innovator taken this into consideration?
thats funny. "people are living where they shouldn't" You can't fix stupid.
Why no mention of the Sears Roebuck factory built homes from a century ago? If the concept is good, why did they go under?
Interesting, looked it up--apparently the Depression causing mortgage defaults and WWII causing lumber and material shortages caused Sears to end the housing kits. Post WWII people wanted more customized homes and homes were more complicated with utilities so those both kept Sears from starting back up. So says Google AI anyway.
the genius of your average mind when given the motivation of the "free market" . Today's athletes seem to be "otherworldly" and these two innovators are also displaying the same otherworldly actions of those athletes .... you have to love it
Can you provide more clarity on the customization of these homes? Is the photo of the Michigan house the actual house, or is that a rendition? I'm envisioning something that looks cheap, and I'm not sure that's what actually possible.
Also, this works in places where there is available land. A lot of the places where people want/need to live are filled with homes that are too expensive, and/or older. I guess Cuby can't solve it all, but it would be great to see this problem addressed as well.
Stephen, the idea of the house factory is brilliant. I wan to see it work. However, I do see a possible issue. Humans inevitably want to show off, to point out how they are better, different, special. I don't know how a cookie cutter house, repeatable down to the electric plate screw position, will feel to humans. Possibly OK, given the human can customize when s/he has the time. That would be my only concern. Otherwise, the idea looks great